Obama Puts Republicans In A Bind On Entitlements

The White House’s weekend ultimatum that Congress either lift the debt ceiling cleanly or take responsibility for default puts Republicans in a bind over their goal of reforming entitlement programs.

In ruling out all executive options, such as minting a high-value platinum coin, the White House put the onus on congressional Republicans to agree to raise the nation’s borrowing limit — without spending cuts or strings attached — or permit the first ever credit default. President Obama has steadfastly rebuffed their calls to cut social spending in exchange for raising the debt ceiling, and Democratic leaders support his position.

“There are only two options to deal with the debt limit: Congress can pay its bills or it can fail to act and put the nation into default,” said Obama’s spokesman Jay Carney. “The President and the American people won’t tolerate Congressional Republicans holding the American economy hostage again simply so they can force disastrous cuts to Medicare and other programs the middle class depend on while protecting the wealthy.”

That leaves Republicans in a difficult position vis-Ã -vis their promise not to raise the debt ceiling without improving the long-run solvency of programs like Social Security and Medicare.If they propose safety net cuts that Democrats oppose, they risk political blowback. If they back off, conservatives will accuse them of surrender on a top priority.

The situation has left Republicans flummoxed. Senate Minority Leader Mitch McConnell (R-KY) lashed out at Democratic leaders after they sent a letter Friday calling on President Obama to raise the debt ceiling unilaterally if Republicans block congressional action.

“The Democrat leadership hiding under their desks and hoping the President will find a way around the law on the nation’s maxed-out credit card is not only the height of irresponsibility, but also a guarantee that our national debt crisis will only get worse,” McConnell said in a statement. He swiped Democrats for refusing to offer “any plan to break the spending habit that’s causing the problem.”

Republican leaders understand the risks of pushing near-term entitlement cuts without Democratic buy-in. During the fiscal cliff battle, they abstractly demanded scaling back entitlements but avoided putting specifics on paper. House Speaker John Boehner’s (R-OH) failed fallback plan didn’t touch entitlements. As he did then, McConnell is again calling on Obama to put forth a debt ceiling plan with spending cuts, in effect suggesting that the president be the one to call for scaling back the safety net.

The other option, backing down on entitlements, is also problematic after Republicans demoralized their anti-tax base by swallowing some $620 billion in tax increases to resolve the fiscal cliff. In accepting the deal, GOP leaders assured conservatives that the debt ceiling was where they would make their stand on retirement programs.

Achieving meaningful savings requires making unpopular cuts beyond what’s been considered recently. Policies under discussion in prior negotiations included reducing future Social Security benefits via Chained CPI and gradually raising the Medicare eligibility age to 67. Both amount to benefit cuts that the public opposes. And the savings they’ll produce would only address a fraction of the programs’ long-term solvency problems.

That’s the GOP’s dilemma in a nutshell: fulfilling their promise to their base requires pushing for something highly unpopular. And this time, not only are Democrats diligently refusing to provide them political cover, but forcing the issue would also require Republicans to court severe economic consequence as their price of political victory.